Camil: The Rice Tide Turned in August — Just Too Late for Q2

A commodity-cycle inflection, a deleveraging runway, and a food CEO candidly naming betting apps and weight-loss pens as demand leaks

CAML3.SA · Earnings Call · 2026-10-09

The ugly headline and the green shoot underneath

Camil Alimentos closed its fiscal second quarter (period ended August 2026) with a statement that reads like a company still underwater: consolidated volume of 605,000 tonnes, down 5% year-over-year; net revenue of BRL 2.8 billion, off 7%; EBITDA of BRL 225 million at an 8.2% margin, down 10% from the prior-year quarter. But the same release carries the turn the market has been waiting for. Gross margin expanded 2.1 percentage points to 24.7%, and the business grew sequentially — revenue up 4%, EBITDA up 7.3%, volume up 2% — the second straight quarter of sequential volume expansion. The pivotal variable is rice price, and management was blunt that the recovery simply arrived too late to flatter the print. “the big price recovery happened over the month of August, which our sales prices were more concentrated in the last week of August... the impact was practically not seen in Q2, but we can see full impact in September.” — Luciano Quartiero, Chief Executive Officer · 2026-10-09 That is a clean setup: the P&L looks weak precisely as the input that governs it turns. Rice is where Camil makes its margin, and the CEO was unambiguous that this reads as a genuine price recovery rather than a head-fake — it is now the single biggest theme in the quarter's keyword set, a status change worth marking because the prior tone had been one of disciplined defense. The mechanics of why Q2 looks so bad are mostly accounting. Revenue was pressured by low rice prices, which flatters nothing but the denominator — “SG&A accounted for 20% of net revenue, up 2.9 percentage points from the second quarter of 2025. It is important to note that the SG&A percentage of revenue is affected not only by expense growth but also by revenue dynamics.” — Flávio Vargas, Chief Financial Officer and Investor Relations Officer · 2026-10-09 In other words, roughly a third of that ratio pain is a revenue line that should normalize as rice prices feed through. Sugar is the other swing factor: management framed a hard profitability threshold, noting international prices now sit between $0.20 and $0.22 and that only above $0.25 does the mix bite margins.

El Niño is no longer a Camil problem — it's a world problem

The forward-looking risk is agronomic, and it is not idiosyncratic. Camil flagged that Brazil's planting area is smaller and that rainfall has delayed the Rio Grande do Sul planting season — El Niño is showing up in practice, not just in models. Crucially, El Niño is a top-tier keyword in the broader market context as well (a high-momentum global theme in the prior quarter), which means Camil is riding a macro weather wave, not manufacturing a scare. It also has a mirror image in the US, where management noted a 23% smaller crop.

The months of November, December, and January will be decisive for us to measure the size of the impact that we will have on the crops... depending on the size of the impact, prices may increase more than what we have seen so far.
Luciano Quartiero, Chief Executive Officer · 2026-10-09

The one credible cap on that upside is India — high inventories and an unresolved question of whether it defends domestic prices or floods export markets. That is the swing factor to watch for the Coffee-style scarcity trade to extend into rice. Note too that Camil's high-growth engine — fish, coffee, cookies, pasta — is working independently of the rice cycle: that segment grew volume 14% year-over-year, with Chile and Ecuador recovering competitiveness as the price gap between local and imported rice narrowed.

The deleveraging runway is the real strategic story

Strip out the commodity noise and the more consequential narrative is balance-sheet repair. Net debt stands at BRL 4.1 billion, a 4.7x leverage ratio, flat sequentially — but management laid out four converging fronts that should bend it down: CapEx normalizing after the completion of the Cambaí project, lower interest rates, recovering cash generation, and small asset disposals. They even set a re-ignition point for M&A: “the company can start thinking about other growth opportunities when leverage is below 2.5x.” — Luciano Quartiero, Chief Executive Officer · 2026-10-09 What makes that runway credible rather than aspirational is capacity. Arthur Devite of XP asked how much volume Camil can add without spending, and the answer was striking: “In all categories and in all countries, we do have capacity to grow 30% without requiring additional investments in expansion. This lower volume of CapEx should last for at least two and a half years, maybe three years.” — Luciano Quartiero, Chief Executive Officer · 2026-10-09 This is the utilization capacity story beneath the commodity story — meaningful idle capacity in pasta, cookies and coffee (40-60% utilization) means the next leg of growth is operating leverage, not capex. That is precisely the formula that turns a 4.7x levered balance sheet into a 2.5x one on the back of results rather than asset sales.

The headwinds nobody expects a food CEO to name

Beneath the numbers is an unusually candid read on the Brazilian consumer. Asked about volume momentum, the CEO volunteered that demand is being taxed by forces most packaged-food CEOs never mention on the record: “how much interest rates are consuming of the family's households, and how the betting platforms and the impact of those weight loss pens. Everything will bear an impact.” — Luciano Quartiero, Chief Executive Officer · 2026-10-09 The betting platforms and GLP-1 weight-loss pens are, in his framing, real household wallet competitors — a concession that quietly doubles as the rationale for the new go-to-market push, where the company added permanent promotional and promoter spend to buy volume. The tension worth watching is that this spend is now structural: “The trend is that the expenses will continue at these levels. They are part of this new model of ours to go to market, and it's bearing fruit.” — Luciano Quartiero, Chief Executive Officer · 2026-10-09 If rice prices deliver the top-line tailwind management expects, that fixed SG&A finally dilutes — and the sequential margin expansion already hints it is starting. The risk is that El Niño delivers a smaller crop and higher input costs before the pricing power fully lands. For a mid-cap with leverage still above 4x, the next two quarters are the whole thesis: the inflection is real, but it is only just arriving.